Royal Bank of Scotland has reportedly agreed a "golden hello" worth more than £7 million to hire a star banker.

The part-nationalised bank, which is 70 per cent owned by the taxpayer, has offered the deal to poach Antonio Polverino from Merrill Lynch.

News of the RBS deal comes just days after the Financial Services Authority was accused of watering down its bonus crackdown, and will further fuel concerns over the return of mega City pay packages.

Rbs only last week announced the appointment of new finance director Bruce van Saun, who joins next month from Bank of New York Mellon, where he is said to have earned around £5.4m.

The majority State-owned bank is also under fire over a multi-million pound project to fit out central London offices for thousands of staff.

Rbs has so far taken £20 billion of taxpayer cash and is preparing to offload billions of pounds worth of assets turned sour into the Government's toxic asset insurance scheme after buckling amid the credit crunch.

It last week reported bad debt charges of £7.5bn in the first six months of the year and, despite narrowly scraping out of the red with pre-tax profits of £15m, warned that its recovery was still several years away.

Reports of the bank's spending spree on new hires and offices comes at a delicate time, with the taxpayer still sitting on a substantial paper loss on its stake.

But RBS is keen to attract new talent to help rebuild the bank, which it said will ultimately benefit the taxpayer.

The group declined to confirm the pay packages agreed to lure in Polverino or Van Saun, although chief executive Stephen Hester said last week on announcing the finance director's appointment, he would be on slightly less than his predecessor.